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201 homes available & dropping
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“There’s nothing out there.”

People in the hunt to buy houses are starting to use those four words more and more as buyer interest continues to drive down the Manteca resale inventory despite foreclosures and short sales entering the market at a steady clip.

As of Monday, there were 201 existing homes available. That’s down from a record 651 in September 2007 and down a jaw dropping 175 since the first of the year.

To explain why that is jaw dropping, the Manteca real estate market went through 2008 dropping 96 homes in overall inventory from where it stood at 522 on Jan. 1, 2008.

With 2001 homes available the words “there’s nothing out there” may seem weird but it reflects reality.

First, not everyone is going to quality for a $300,000 plus house. There are a lot of empty McMansion-style homes that have dropped substantially. They aren’t going to drop below $240,000 where 80 percent of the buying activity is taking place in Manteca. Those who think that is going to happen need a reality check.

Second, there are homes out there that quite frankly most people wouldn’t buy. They go beyond simple cosmetic issues and a structural issue or two. And some are located in extremely less desirable neighborhoods. Those homes are destined to eventually be bought for under $80,000 by some investor who understands the risks but can come out money ahead.

Third, now that the foreclosure list is tightening up and some banks are getting realistic about selling before homes get to that point, short sale activity has picked up significantly.

Fourth, people who had waited for “price to drop farther” just like those who are on the sidelines now have increased the pool of buyers significantly. They are all bidding against each other for the same homes.

Yes, more foreclosures are on the way but you can start seeing a glimpse of where this is going. One day – perhaps months from now, maybe a year from now – people are going to start getting squeezed out. Instead of falling prices – which have slowed down in the bottom third of the housing market to a trickle -  prices will again one day start inching up ever so slowly.

The odds are we aren’t going to return to the disasters days of three years ago. But with every uptick in housing price someone who is qualified today to buy gets squeezed out.

Realtors aren’t kidding when they tell you if you are at all interested in buying to get off the fence now. You may have credit issues to clear up or you may have an extended period of reality education needed to see exactly what you’re dealing with. All of those cream puff deals you hear about have been taken for the most part. Now it’s a mad dash to get a solid house before the inevitable return of a normal market.